The chief executive of one of Kenya’s biggest lenders has said that crypto could become part of the mobile money ecosystem if the country’s watchdog decides to give it the green light.
Equity Group Holdings Plc CEO, James Mwangi, commented on the future of crypto mobile payments while at the Bloomberg Invest event, saying “cryptocurrency can as well complement the mobile money wallet, but essentially, we need to talk to the regulators.”
Pinning hopes to move from M-Pesa to e-Pesa
Despite a small crypto economy in Africa as per data by Chainalysis, Kenya held its ranks in the top 20 of the Global Crypto Adoption Index in 2021, along with Nigeria, South Africa, and Tanzania. It is estimated that around 4.5 million people, which comes to 8.5% of Kenya’s total population, owned cryptocurrency as of 2021.
Mwangi also commented, “Africa will benefit substantially from leapfrogging on the fourth industrial technologies, and cryptocurrency is one of them,”
Mwangi believes that the popularity of mobile money transactions was accelerated only once the regulator showed a willingness to accept the technology. Considering, M-Pesa, which is a mobile-based money transfer service that has experienced major success since 2007.
He explained, “Remember, if you look like Kenya, the mobile digital transactions or digital money is bigger than now hard currency”
Kenya aware of potential risks in private crypto space
In Africa, the CEO is now also hoping the regulator push crypto as a regulated sector, adding, “We are hoping that the use of technology, particularly data and artificial intelligence, will be a major basis of leapfrogging because we are not talking about existing manufacturing capacity, we are starting afresh,”
That said, the Central Bank of Kenya (CBK), like several African countries, has also raised potential risk concerns in the crypto sector. However, CBK has refrained from announcing a legislative ban on the virtual asset class and has instead put out investor protection guidelines.
Earlier in March, CBK governor Patrick Njoroge had advised Kenyans to avoid peer-to-peer (P2P) crypto transactions. He had said, “There are people who are excited about cryptocurrencies because they see it as a sort of investment that they can win big because prices are going up quickly, so they believe they would see a huge return for their investment.”
‘‘But I think that is why we say for every person who wins something, there are hundreds who lose,” Njoroge had told the local paper.
Meanwhile, another African country, Nigeria, has recently announced regulations for digital assets.
CBDC in works
The CBK had published a discussion paper to look at the benefits and potential risks of a central bank digital currency (CBDC). The paper is reportedly open to public comments till May 20, 2022, but the governor isn’t seeing CBDC as a ‘silver bullet’ for financial inclusion.
Njoroge had previously stated, “The point here is let’s not look at CBDCs as the silver bullet for all the problems that we have. On the contrary, deal with the problems directly,”
Meanwhile, Tanzania is also working on a digital currency after Nigeria launched eNaira last year.
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